Correlation Between Amg Timessquare and American Beacon
Can any of the company-specific risk be diversified away by investing in both Amg Timessquare and American Beacon at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Amg Timessquare and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg Timessquare Small and American Beacon Stephens, you can compare the effects of market volatilities on Amg Timessquare and American Beacon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Amg Timessquare with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Timessquare and American Beacon.
Diversification Opportunities for Amg Timessquare and American Beacon
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Amg and American is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Amg Timessquare Small and American Beacon Stephens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Stephens and Amg Timessquare is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Amg Timessquare Small are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Stephens has no effect on the direction of Amg Timessquare i.e., Amg Timessquare and American Beacon go up and down completely randomly.
Pair Corralation between Amg Timessquare and American Beacon
Assuming the 90 days horizon Amg Timessquare Small is expected to generate 0.99 times more return on investment than American Beacon. However, Amg Timessquare Small is 1.01 times less risky than American Beacon. It trades about 0.25 of its potential returns per unit of risk. American Beacon Stephens is currently generating about 0.22 per unit of risk. If you would invest 1,368 in Amg Timessquare Small on August 29, 2024 and sell it today you would earn a total of 116.00 from holding Amg Timessquare Small or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amg Timessquare Small vs. American Beacon Stephens
Performance |
| Timeline |
| Amg Timessquare Small |
| American Beacon Stephens |
Amg Timessquare and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg Timessquare and American Beacon
The main advantage of trading using opposite Amg Timessquare and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Timessquare position performs unexpectedly, American Beacon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in American Beacon will offset losses from the drop in American Beacon's long position.| Amg Timessquare vs. Amg Timessquare Mid | Amg Timessquare vs. Amg Timessquare Small | Amg Timessquare vs. Vanguard Institutional Total | Amg Timessquare vs. Jpmorgan Intrepid Growth |
| American Beacon vs. Putnam Equity Income | American Beacon vs. Putnam Growth Opportunities | American Beacon vs. HUMANA INC | American Beacon vs. Aquagold International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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